UPDATE 2-Brazil's Camil may cut IPO price tag, sources say

SAO PAULO, Sept 25 (Reuters) - Brazilian food producer Camil Alimentos SA is considering cutting the suggested price range for an initial public offering slated for Tuesday by almost 15 percent amid weak investor demand, two people with knowledge of the plan said.

One of the people said lowering the suggested price range to between 9 reais and 11 reais from between 10.5 reais and 12.5 reais would “be enough to stop the investor pushback.” The same person said that, at 10.5 reais, the stock on offer for the IPO remained above firm bids.

The people requested anonymity because terms of the transaction remain private.

Some investors who considered participating in the deal told Reuters last week that the stock looked expensive at the original price range. Camil and shareholders including Warburg Pincus LLC aimed to raise up to 1.7 billion reais ($542 million) in the offering at the top of the original range.

The situation shows how investors remain in control of Brazilian IPO pricing, despite a rally in the country’s benchmark stock index and the best year for offerings since 2013. Two other IPOs have sunk during pricing this year due to signs of strong investor resistance.

Last week Camil, Brazil’s No. 2 producer of canned fish, postponed the pricing date for the IPO to Tuesday from last Wednesday. While the company cited the need to add more data to the prospectus, one source said the delay helped bankers “buy some time” to save the deal.

Equity capital markets activity has skyrocketed in Brazil over the past year as Latin America’s largest economy slowly recovers from a harsh recession and the government remains committed to cutting a widening budget gap. (Reporting by Guillermo Parra-Bernal; Additional reporting by Bruno Federowski in São Paulo; Editing by Paul Simao and Lisa Von Ahn)